The House of Representatives passed the $6 billion “cash for caulkers” program Thursday to give homeowners rebates of up to $8,000 for energy efficiency retrofits.

By a vote of 246 to 161, it passed the Home Star Energy Retrofit Act, backed mostly by Democrats including President Obama and industry groups including the U.S. Chamber of Commerce, the National Association of Manufacturers and the National Association of Home Builders.

GOP members questioned the price tag at a time of mounting budget deficits. “We are going to authorize $6.6 billion of money we don’t have so we can caulk homes?” asked House Republican leader John Boehner of Ohio during debate, according to the Associated Press.

The Senate has yet to vote on the two-year program, which will give rebates for adding insulation, sealing ducts and installing efficient water heaters, heating units and windows. It also includes $600 million in grants to states for programs to replace mobile homes with more energy efficient models.

“Home Star is a practical, common sense investment in job creation and energy savings,” says co-sponsor Rep. Peter Welch, D-Vt., who estimates three million families will participate.

Rebates will be worth $1,500 per measure, capped at 50% of project costs or $3,000, whichever is less. They could reach $8,000 for a whole-house retrofit that’s based on a thorough energy audit.

read full article

As the nation struggles to recover from one of the worst economic recessions in decades, unemployment has recently shown some marginal improvement, falling below 10 percent in January. But for workers in the construction and construction-related manufacturing sectors, there is little relief as jobless rates remain at near-Depression levels.

Fortunately, help is on the horizon. This week a bill establishing a HOME STAR program of consumer rebates for home energy efficiency retrofits will be introduced in the Senate thanks to the leadership of Sens. Mark Warner (D-VA) and Jeff Bingaman (D-NM), among others. Concerned members of Congress, with the Obama administration’s support, have crafted an incentive program to make millions of U.S. homes more energy efficient, swiftly create 168,000 jobs in construction and manufacturing among other industries, save homeowners nearly $10 billion over a decade through lower energy costs, and make a dent in global warming pollution.

The proposal for a $6 billion HOME STAR program enjoys broad and bipartisan support. It is backed by the President’s Economic Recovery Advisory Board and is part of a jobs agenda endorsed by some Senate Democratic leaders. A large and broad coalition including major corporations, organized labor, and energy nonprofits supports the initiative as well. In President Barack Obama’s State of the Union address he said that rebates for Americans who retrofit their homes should be part of a clean-energy agenda. “We should put more Americans to work building clean-energy facilities, and give rebates to Americans who make their homes more energy efficient, which supports clean-energy jobs,” he said. The Senate will soon consider jobs legislation and HOME STAR should be a key component.

HOME STAR, sometimes called “cash for caulkers,” is a proposal that makes sense. It makes economic sense because it can provide a quick employment stimulus putting 168,000 people to work—the overwhelming majority of them in jobs that can’t be outsourced overseas. It makes sense for homeowners who will be able to afford home improvements that will pay real dollar dividends for many years by reducing their energy bills 20 percent or more forever. It makes sense for businesses who will see demand for their products increase. And it makes sense for a more secure energy future since increasing the number of homes with energy efficient retrofits from 200,000 a year to 3 million a year will cut global warming pollution by the equivalent of taking 615,000 cars off the road or decommissioning four 300-megawatt power plants.

As important as these energy benefits are, however, HOME STAR is clearly a job creator and the right medicine for the economy.

Consumer incentives

The program gives homeowners a choice of incentives: the SILVER STAR and GOLD STAR paths.

The SILVER STAR incentive provides rebates for purchasing and properly installing specific energy-saving equipment such as furnaces and water heaters, or changes to a building’s envelope such as insulation and duct sealing. Rebate amounts are up to $1,500 per qualified installed measure, capped at 50 percent of project costs or $3,000—whichever is less.

The GOLD STAR incentive goes a step further and rewards whole-home or office building retrofits. This performance?based incentive is based on predicted energy savings determined by a thorough energy audit performed before the work begins. The auditor tests the home’s energy performance using proven building science methods, designs a customized retrofit plan in consultation with the homeowner, and calculates the energy savings that will result from the recommended measures. Homeowners can receive $3,000 for modeled savings of 20 percent, plus $1,500 for each additional 5 percent of modeled energy savings, with total incentives of up to $8,000, not to exceed 50 percent of total project costs. This will encourage homeowners to invest in the most cost-effective technologies, which are often the simplest and most labor-intensive investments.

Economic benefits

HOME STAR will create 168,000 jobs according to independent analysis by Climate Works using respected economic models from REMI and McKinsey & Co. Those jobs will be heavily concentrated in the hard-hit construction and manufacturing sectors of the U.S. economy and will benefit every state and both urban and rural communities.

The program will help create long-term construction industry careers by increasing demand for home energy retrofits roughly 15 times, rising from current rates of 200,000 homes a year to close to 3 million retrofits annually. It will also provide much-needed help to the retail sector where overall jobs have fallen 7.5 percent since December 2007 but 10.4 percent for building materials and garden supply stores. Jobs in the wholesale sector have declined 22.5 percent for construction supplies compared to 8.1 percent overall.

The HOME STAR program dedicates $200 million to increase consumer access to financing, which further boosts job creation by leveraging additional private capital investments, and helps homeowners overcome upfront cost barriers to paying for these energy-saving home improvements.

What’s more, HOME STAR investments are cost effective, creating an additional economic benefit by saving homeowners as much as $9.4 billion over 10 years. HOME STAR will also affordably reduce carbon dioxide emissions by 4 million tons per year, or 40 million tons by 2020. That helps the economy by reducing our vulnerability to energy price shocks and getting a head start on driving down the production of greenhouse gases—changes we know we need to make anyway.

read full article

NEW YORK (CNNMoney.com) — Investing to make your home more energy efficient may lower the bills, but it may not boost its price, partly because these investments aren’t fully valued by appraisers.

“Everyone is talking about return on investment, it’s the first thing customers want to know,” said Jeff Geoghan, a Coldwell Banker realtor in Lancaster, Penn. “But the appraisal industry is not up to speed on this at all.”

Nearly everyone agrees that performing an energy retrofit will make your place more comfortable and save a lot on bills. But if the retrofits don’t add value to the home’s price, will homeowners make the improvements, regardless of whether or not the government decides to pick up half the tab, as they are considering?

Details have yet to be ironed out and passage is not a sure thing, but it’s thought a new jobs initiative being pursued by Democrats in Congress may funnel some $11 billion towards home energy efficiency.

It’s designed primarily to put contractors back to work, doing things like adding insulation, caulking windows and doors, and upgrading heating units, air conditioners, hot water heaters and other appliances.

If passed, homeowners may be eligible for a tax credit worth up to $12,000, or half the cost of the retrofits, which ever is lower.

If a homeowner spends $24,000 and cuts its energy use in half – probably the most ambitions reduction that can reasonably be achieved – it would save the average homeowner $100 a month on their utility bills, said Lane Burt, manager of building energy policy at Natural Resources Defense Council.

Many homeowners would likely opt to spend less, going for the cheapest options that save the most energy. Contractors who perform energy retrofits say most people spend around $6,000 or $7,000, and the payback time is around 5 years.

But assuming the full amount is spent and the savings are $100 a month, that should result in a substantial increase in home’s valuation. After all, an extra $100 a month one could put towards a mortgage means an increase of $20,000 on the purchase price for a home, according to a calculation done on a purchase price calculator.

Yet that extra $20,000 does not show up on a home’s appraisal.

Part of the problem is that many real estate appraisers aren’t trained to look for energy efficiency upgrades.

“There are appraisers out there that have extremely minimal education,” said Leslie Sellers, president of the the industry association the Appraisal Institute.

Sellers said the institute is currently running green certification programs that will teach appraisers how to better value upgrades like efficiency improvements.

Sellers also suggested going with a better trained appraiser – a “certified appraiser” – when getting a home evaluated, even if they cost more money.

read full article

EAST LANSING, Mich. – Krista and Micah Fuerst were looking near here to buy their first place together, and had narrowed it down to two houses: One built 25 years ago of standard materials, the other brand new and built to strict energy efficiency standards.

The couple’s choice was easy: They picked the Energy Star home, the U.S. Environmental Program’s top energy ranking.

But they’re in the minority.

About 17 percent of new homes built in 2008 earned the Energy Star label. The proportion – which is expected to reach 20 percent when 2009’s figures are tallied – marks a five-point increase from 2007 and “indicates such incredible success,” said Sam Rashkin, national director of the program’s section for homes.

Home energy use accounts for 16 percent of the United States’ greenhouse gas emissions.

Despite the EPA’s gains, some 99 percent of American houses are “sick” – damp, drafty, dusty, noisy and expensive to heat and cool – and “could be made at least 30 percent more energy-efficient with highly cost-effective, tried-and-true energy-efficiency improvements,” according to Rashkin.

The Energy Star program won’t solve this. Energy Star is meant to reflect the cream of the housing stock, and thus, program officers say, will always represent a minority of American homes.

Experts say economics and regulations are the root of the problem: Mortgages are structured in ways that fail to recognize efficiency’s benefits, while a patchwork of inconsistent and ill-enforced energy codes provides conflicting signals to industry.

Before the mortgage crisis, when loans were easier to come by and energy was relatively cheap, energy-efficient mortgages weren’t very enticing, experts say, and lenders didn’t bother with them. Now the specialized options are more valuable, but lenders have grown accustomed to ignoring them.

“It’s really unfortunate,” said Jennifer Amann, buildings program director for the American Council for an Energy-Efficient Economy. “Energy-efficient mortgages have been available now for 20 years or so, but they’re a really underutilized tool.”

Sam Rashkin agrees.

“We need a massive education of how to use energy-efficient mortgages, now that they can offer a meaningful solution,” he said.

While energy-efficient mortgages are a good idea, there’s a more obvious solution, according to Cliff Majersik, executive director of the Institute for Market Transformation, which advocates for energy efficiency:

Make all mortgages – not just specialized ones – account for energy use.

“The fact is that energy-efficient homes have much lower foreclosure and delinquency rates. So that’s a market failure, that we’re not giving homeowners credit for buying good, efficient homes,” Majersik said. “The challenge is that there are processes that have been in place for a long time, and there’s pretty clear evidence that they’ve let us down.”

Advocates also say national efficiency efforts have been let down by the codes that set minimum requirements for efficiency.

“Energy codes have existed for a long time, but they haven’t really done anything,” said Aleisha Khan, executive director of the Building Codes Assistance Project, a coalition that helps state and local governments implement efficiency requirements.

Certification programs like Energy Star “pull the market” by spearheading efficiency efforts, “and then you’ve got codes, dragging up the bottom,” she said. “Code is not Energy Star. Code is common sense.”

read full article

The White House and business leaders team up to craft a program to encourage energy efficient home improvements.

Josh Hewey blows in bio-based, closed-cell foam insulation in the upper floor of a Jamaica, Vt., home originally built in the 1700's. Workers with Thermal House retrofit a home to make it more energy efficient, thus reducing its carbon footprint. The Obama administration hopes to spur interest in similar work through a proposed Home Star, or 'Cash for Caulkers,' program. Melanie Stetson Freeman/Staff

The Obama administration has teamed up with green-sector entrepreneurs to craft a vision for a program that Congress could enact later this year. Officially, the plan is called Home Star, but it’s also quickly becoming known as “cash for caulkers.”

Despite its simple appeal, the plan faces a number of practical hurdles.

During a late December lunch with business leaders to discuss the proposal, President Obama asked that the end document be “simple, quick, but effective,” said Steve Cowell, CEO of Conservation Services Group in Westborough, Mass. For Mr. Cowell and other energy-saving proponents, that means grappling with two tough challenges: how to get homeowners to buy into the program and how to build a nationwide industry, complete with training and accreditation, from a disparate collection of state and local programs.
Two kinds of subsidies

To attract homeowners, Home Star will offer two tracks of incentives. The first, “Silver Star,” track subsidizes the purchase of services, like roof installation, as well as products, like efficient windows and furnaces. The incentives will be designed to get homeowners and businesses to try the program.

The second, “Gold Star,” track offers incentives tied to overall reductions in a home’s energy usage. A 20 percent reduction in energy output would be eligible for $3,500 in rebates, with each 5 percent of additional energy savings adding $1,500 in incentives. The government would fund no more than 50 percent of any project’s total cost.

Gold Star’s bigger financial incentives are aimed at getting larger energy savings, treating a home as a system rather than as disparate parts, says Matt Golden, president of a San Francisco-based home-retrofitting firm and a leading player in creating the program. “We need to make sure the investments that we’re making right now will be sustainable and will have a long-term impact.”

Organizers, while optimistic, admit they have a long way to go. For example: Even environmentally minded Vermont is struggling to increase the number of home retrofits done.

With the cost of making the average home 20 percent more efficient running between $5,000 and $10,000, only a few hundred Vermonters are retrofitting their homes in any given year. It’s “a drop in the bucket,” says Blair Hamilton, the policy director of Efficiency Vermont, a group that coordinates retrofitting activity in the state. “We haven’t broken a thousand [retrofits] a year. And we need to.”

But the small numbers speak more to the small dollars behind the project than consumers’ lagging interest in the project, advocates say. Where there are homes, says Rep. Peter Welch (D) of Vermont, there is potential demand for retrofitting and, thus, the potential for new jobs, even in remote rural areas.

read full article

AUGUSTA – Governor John E. Baldacci today unveiled a new benefit available to Mainers who improve the energy efficiency of their homes.

“The Maine Home Performance program is open for business,” said Governor Baldacci. “All Maine homeowners are able to participate. By making eligible improvements in their homes, they can access rebates of up to $3,000 and save between 25 percent and 50 percent on their home heating bill.”

The program, administered by Efficiency Maine, is an important way to encourage Maine people to consider improving their homes to save energy. Last year the Legislature passed the Governor’s energy bill that set the goal to weatherize all Maine homes and half of Maine businesses by 2030.

There is no income limit to participate in the Maine Home Performance program. To qualify for rebates under program, homeowners must have an energy audit performed by a certified audit and improvements made must achieve at least 25 percent savings in heating and hot water fuel usage.

A full list of eligible improvements and eligibility requirements are found on Efficiency Maine’s web site, www.efficiencymaine.com/mainehomeperformance.htm In addition, a toll free number is available at 877-334-6583, and 2-1-1.

The Governor was joined at the kickoff of the Maine Home Performance Program by Speaker of the House Hannah Pingree; Sharon Reishus, Chair of the Maine Public Utilities Commission; Dale McCormick, Director of Maine State Housing Authority; John Brautigam, Director of Efficiency Maine; Richard Burbank of Evergreen Home Performance, a qualified weatherization contractor; and a couple, Stuart Finkelstein and Jane Funk, from Warren who recently had their home weatherized by Burbank. The couple received a check from the Maine Home Performance program of $3,000.

Maine Public Utilities Commission Chair Sharon Reishus noted, “Many Maine homeowners would save significantly on their energy bill by implementing basic measures such as weather sealing, insulation, and basic steps to maximize the efficiency of the home’s heating system.”

The Governor said that Maine Home Performance program will also create jobs for qualified weatherization auditors, installers and retailers. The program is based on quality workmanship by certified professionals, generating real energy savings for every participating homeowner. In addition, carbon emissions will be reduced through the energy improvements.

read full article